Table Of ContentHealthcare Systems and Services
India Healthcare:
Inspiring possibilities, challenging journey
Prepared for Confederation of Indian Industry (CII)
December 2012
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Healthcare Systems and Services
India Healthcare:
Inspiring possibilities,
challenging journey
Prepared for Confederation of Indian Industry (CII)
Ayushi Gudwani
Palash Mitra
Ankur Puri
Mandar Vaidya
December 2012
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India Healthcare
Inspiring possibilities, challenging journey 3
Foreword
In 2002, McKinsey & Company authored a joint report with CII that became the
beacon for many in the hospital industry and a cornerstone for decision making.
While the report was a landmark in of itself, it was narrowly focused on the provider
industry and was limited by availability of reliable data and nascency of several
parts of the healthcare value chain. Since then, healthcare has moved in rapid
strides in India. The government has made several landmark moves including the
NRHM, the RSBY, and the Clinical Establishments Act. The private sector has grown
across the value chain. Hospital chains have emerged as standalone corporate
entities, as have diagnostics providers. Health insurance, devices and equipment
manufacturers have come into their own. Pharmaceuticals players too have
continued to grow. Collaboration between the government and private sector has
emerged stronger, with some successes.
At the same time, we continue to face challenges as a system. The nation’s health
outcomes continue to lag. Collaboration between government and private sector
continues to struggle to find scale. The private sector is struggling to keep margins
at reasonable levels for their shareholders.
Given this inflection point, we felt the time was right for another landmark report.
This time, a report much wider in scope, and much better informed with data and
opinions from across all parts of the healthcare value chain.
We thank McKinsey & Company for taking up this challenge and doing a
commendable job in authoring this report. We hope it will have a meaningful impact
in moving India’s health system forward, and convert possibilities into reality.
Dr Naresh Trehan
Chairman,
CII National Committee on Healthcare
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India Healthcare
Inspiring possibilities, challenging journey 5
Preface
India has embarked upon a journey of healthcare system transformation. The
government introduced important structural reforms in the last decade and has
re-emphasised its vision of creating access to a minimum set of healthcare services
for all. The private sector experienced unprecedented growth during this period.
Growth in the next decade will be closely linked to the nature and extent of reform.
India’s health challenges, though unique and complex, also offer remarkable
opportunity. Thus, the next decade holds inspiring possibilities, while likely being a
challenging journey.
McKinsey & Company conducted a research effort in 2002 and published a report
entitled Healthcare in India: The Road Ahead, written jointly with Confederation of
Indian Industry (CII). The challenges identified in 2002 are still relevant, although the
sector has made significant progress since then. Today, some extent of government
reform combined with private sector enterprise, put us in a better position to meet
our health goals.
A decade since the publication of the earlier report, we have now undertaken a
similar effort for the CII. This time with a broader aspiration. We have extended the
scope beyond just healthcare delivery infrastructure, and discussed the matter of
the country’s health system. We attempt to learn not just from India’s experience,
but also from the health reform journey of peer nations. We delve into the role and
imperatives of the government in this journey. Within the private sector, we study
different verticals, including providers, insurers, pharmaceuticals and medical
devices and equipment manufacturers.
We fully expect Indian healthcare to evolve substantially over the next decade, and
the country to make great progress towards achieving its long-term healthcare
vision. Our goal in this effort has been to provide industry leaders and policy makers
with an integrated and realistic view of the opportunities and challenges. This work
is independent and has not been commissioned or sponsored in any way by any
business, government or other institution.
Palash Mitra Mandar Vaidya
Director, Partner,
McKinsey & Company McKinsey & Company
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India Healthcare
Inspiring possibilities, challenging journey 7
Acknowledgements
Ankur Puri, an Engagement Manager based in our New Delhi office, managed the
overall research effort. Ayushi Gudwani, an Engagement Manager based in our New
Delhi office, provided valuable guidance and worked closely with the team in writing
this report.
The core team comprised Surabhi Bhandari, Puja Jain and Prakash Deep
Maheshwari, consultants based in our New Delhi office, and Shubham Rao, analyst
from our Knowledge Centre in Gurgaon.
This report would not have been possible without the thought partnership and
expertise of industry veterans who constituted our steering committee. To them,
we extend our sincere thanks. In particular, we would like to acknowledge the
leadership and guidance of Dr Naresh Trehan, Chairman of the CII National
Committee on Healthcare.
We have been fortunate to have benefited from the guidance of several leading
thinkers, stakeholders and decision makers in the Indian healthcare system.
Their valuable inputs have shaped our thinking. In particular, we would like to
acknowledge the inputs and counsel of Amit Bhandari, Maulik Chokshi, Keshav
Desiraju, Sanjay Dutta, Shakuntala D. Gamlin, M. B. Jain, Maliekkal Jeeson, Anup
Karan, Anand Lal, Sanjay Mohanti, Somil Nagpal, Ajay Pitre, Krishna D. Rao, Sarit
Rout, K. Srinath Reddy, Anil Swarup and Alok Agrawal.
We would like to acknowledge the contributions of our colleagues from the India
office, Chirag Adatia, Ramnath Balasubramanian, Kaustubh Chakraborty and
Sathya Prathipati in guiding us in their areas of expertise.
Our colleagues Claudia Süssmuth Dyckerhoff, Minyoung Kim, Alexander Ng and
Ali Ustun shared their perspectives on the health systems of other countries. Paula
Afonso, Luiza Semeghini, Radhika Sriram, Pornnipa Srivipapattana, Nitin Mukesh
Chaturvedi and Ravi Yadav from the McKinsey Knowledge Centre provided valuable
research support to the effort.
We would like to thank Nipun Gosain, Vineet Kumar and J. Sathya Kumar, for their
assistance in visual graphics; Jeanne Subramaniam for her editorial efforts; and
Fatema Nulwala and Kulsum Merchant for their support in external relations.
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Description:India has embarked upon a journey of healthcare system transformation It is
abundantly clear that a 'status quo' approach will be inadequate to tackle this.
